“Disruptive innovation leads to the creative destruction of businesses that once seemed pre-eminent and secure.” Steven Blank
Disruptive innovation is creating new products or services that did not exist before. The innovation creates a new market that disrupts an existing market and displaces an earlier technology. This type of innovation is associated with startups. Large companies try to innovate like startups, but because of their structure cannot. Companies that do not innovate will have a limited life and go out of business. The world is changing at amazing speed. Companies that solve disruptive challenges and innovate become the new market leaders.
- Globalization: An example is: Asia is both a customer and a vendor.
- Distribution: Channels of distribution are changing from physical to virtual.
- Communication: The Internet gives instant information.
- Markets: Market creation is valued more than market share.
Examples of disruptive innovation:
- Automobiles replacing horse and buggies as a means of transportation.
- Television replacing radio as a means of receiving entertainment and news.
- Fax replacing telex to send business information.
- Personal computers and software replacing calculators, slide rules and typewriters.
- Internet changed how we communicate and access information.
- FedEx and UPS as an alternative to mail.
My Personal Disruptive innovation experience:
I was co-founder and CEO of SafeData, a data backup and recovery company. Our premium service offering was cloud-based high availability. High availability is data replication from one server to another. Infrastructure as a service (IAAS) has replaced high availability. IAAS is a cloud-based service where the client has no servers on site and uses servers in the cloud for all processing. IAAS is giving clients access to the latest technology at a fraction of the cost of high availability. Solution: Companies need to innovate like startups. Ideas:
- Change the corporate culture to be accepting of disruptive innovation.
- Make team members responsible for innovation as part of their job description.
- Buy startups with disruptive technology and help them grow the technology.
- CEO’s must support disruptive innovation by creating the right culture, environment and rewarding disruptive behavior.
- Start startups with the goal of replacing existing technologies.
Can you list additional examples of disruptive innovation?
What ideas can you add? Why are they important?
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